Digital insurance tools fuel adviser business, not replace it

Westpac customers can now get their insurance through their banking app, thanks to a tie-up with Fidelity Life. The bank appears to be throwing significant resources into its digital tools, having partnered with Dosh to offer home loans back in March.

The new Westpac-Fidelity tool - called the LifeProtect Guide - asks about income, employment status, lifestyle, and personal priorities, and offers recommendations for life and income protection. Fidelity Life Chief Commercial Officer Bronwyn Kirwan said the guide aims to “make it easier for customers to work out what’s right for them.”

Notably, customers can look at coverage and explore the impact on costs without initially needing to consult an adviser.

Specialist advisers see opportunity

Willowgrove Insurance adviser Jon-Paul Hale says that ultimately, it’s no surprise that banks and insurers are finding ways to do business at a lower cost. The increase in adviser market share has actually been bolstered by banks closing down physical branches - and so when it comes to them rolling out new tech, advisers still have plenty of opportunity.

“I think the way forward is going to be specialist, AI-supported advisers,” Hale says.

“At the end of the day, when you’re looking to claim, you want to talk to somebody who’s going to explain how it works. AI is not going to do that with the nuance required for individual situations. It just won’t have the human factor needed when you’re dealing with somebody who’s been told that they have cancer.”

AI also won’t have in-depth knowledge of how claims operate in various situations, and it won’t provide the more tailored arrangements for complex cases. Hale noted that in a recent case, the best combination for a client was life and trauma with one insurer, income and permanent disability with another, and medical insurance with a third.

“If I went with any single provider, I’ve got increased premium rates and multiple exclusions,” Hale says.

“AI may get to that point eventually, but until it is able to digest the underwriting guides of every provider and then understand the human factor of underwriting - which is something of an art form in itself - AI will struggle to come near the more specialised areas of advice.”

ANZ leads global AI spending

The LifeProtect Guide is the latest step in a global move towards digitisation that isn’t likely to slow.

Data from Snowflake and the Enterprise Strategy Group indicated that 32% of ANZ firms are allocating over a quarter of their technology budgets to generative AI, outpacing the global average. A large chunk of these are focusing these efforts on customer-facing applications.

Hale says that ultimately, advisers should see this as an opportunity rather than a threat.

“Those customers have already demonstrated that they’re willing to purchase the product, they just need to talk to an adviser to make sure they’ve got the best product for them,” he says. “Nine times out of ten, what they’ve got isn’t suitable because it’s been self-managed.”